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May 13, 2009

Nortel net loss widens to $507m in Q1

Revenue down 37% on year-ago

By CBR Staff Writer

Network equipment vendor Nortel Networks has reported a net loss of $507m for the first quarter 2009, compared to a loss of $138m in the year-ago quarter, on revenue down 37% at $1.73 billion. The increased loss was attributed to the continuing economic downturn, uncertainty created by creditor protection proceedings, and the impact of foreign exchange fluctuations.

It made an operating loss of $275m compared to profit of $18m in the same period last year. The diluted net loss per share was $1.02 compared to $0.28 a year ago. In January, the company filed for bankruptcy protection in Canada and the US.

The Canada-based company said carrier network revenue fell 32% to $737m, while enterprise solutions revenue fell 41% to $395m. Metro Ethernet networks revenue fell 10% to $360m, LG-Nortel revenue declined 66% to $188m, and revenue from others was flat at $53m.

Geographically, US revenue declined 26% to $803m, while EMEA revenue fell 40% to $356m. Canada revenue decreased 31% to $114m, Asia revenue fell 53% to $366m, and Caribbean and Latin America revenue fell 29% to $94m.

Mike Zafirovski, president and chief executive at Nortel, said: First-quarter results showed a decline in revenue and margins as expected due to the severe economic downturn and our filings for creditor protection. However, despite the declines we saw this quarter, revenue has stabilized and our cash balance is stable from year-end 2008.

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